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You are here: Home Finance & Business Financial crisis leaves euro with new popularity Financial crisis leaves euro with new popularity

04/01/2009Financial crisis leaves euro with new popularity

The European currency celebrates its 10th anniversary.

The euro is set to mark the 10th anniversary of its launch in January with Europe's common currency enjoying a newfound appeal as a result of the financial firestorm that swept through world markets this year.

From solid Sweden to ailing ex-communist Hungary, the euro is suddenly seen as potential protection in a time of crisis.

Despite its success in helping to forge European integration, the 15-member common currency has until recently never enjoyed the same kind of affection among Europeans as the national currencies it replaced in 1999, first as a currency for the financial system. Euro coins and banknotes were issued on 1 January 2002.

Now the mood appears to be changing with the world financial crisis exposing those nations that have chosen to stay outside the currency bloc to attacks on their national currencies and markets as the crisis unleashed by the US mortgage meltdown leaves their banking sectors reeling.

"This is the most severe test the euro has faced," said Klaus Baader, Merrill Lynch's London-based chief European economist. "The euro has shown itself to be an effective shield, especially for smaller economies."

Even in Britain, from where some of some of the most effective assaults on the euro have been launched since it was enshrined in the 1992 Maastricht Treaty, a slightly more sober view of the common currency appears to have emerged.

This comes in the wake of the turmoil that has ravished the City of London’s financial district, sent the national economy into a downward spiral, forced the government to mount state-backed bailouts for the banking sector, triggered a growing round of layoffs and sent the pound plunging.

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